Shares in US alternative energy firm Tesla are trading around 4% lower pre-market on Monday, extending losses seen late last week. This is despite the firm reporting another quarter of positive results. The backdrop of increased fears regarding the potential second wave of the pandemic is exerting broader downside pressure on risk appetite. The decline in Tesla’s share price reflects this.
Solid Q3 Earnings Beat
Tesla reported Q3 earnings per share of $0.54, beating estimates of a $0.52 EPS. Notably, the company posted a new record in the total number of vehicles delivered at 139,300. The delivery number beat Wall Street estimates of 120,000 marking a huge quarter on quarter rise from the 90,000 deliveries made in Q2. It also eclipsed the prior record of 112,000 deliveries in Q4 2019.
Tesla noted that production rose to 145,000 from the prior quarter’s 82,000 given that the closure of the group’s Fremont factory was still impacting production last quarter.
However, the firm has now fully recovered its production to pre-pandemic levels and is adding further capacity. Looking ahead, Tesla announced its goal of delivering over half a million vehicles in total by the end of 2020.
Plans To Purchase German Battery Maker
Tesla has been on a solid roll with the Q3 results marking the fifth consecutive quarter of positive results. Reports highlight that Tesla is now looking to buy German ATW Automation, a manufacturer of assembling battery modules and packs for the auto industry. The company, which is based in western Germany has over 100 staff members. It has further completed over 20 battery production lines for global automakers.
Tesla has highlighted plans to dramatically increase its production capacity over the coming years. It has specifically highlighted aims to reduce the cost of battery packs and make its vehicles more affordable.
Tesla Shares Remain Range-bound
Shares in Tesla have continued to trade within the 359.71 – 455.10 range which has framed price action over the last two months.
Following the reversal from 502.12 all-time highs, Tesla shares found support at the 359.71 level, buoyed also by rising trend line support though, for now, remain capped by resistance at the 455.10 level.
In light of the longer-term bull trend, the current price action can be viewed as corrective, with price currently consolidating. This will keep the focus on an eventual break higher. Only a move below the 359.71 level and rising trend line support would change this view.